The collapse of Long-Term Capital Management (LTCM) is a classic risk management case study. Which of the following statements about risk management at LTCM is correct?

LTCM did not run any stress scenarios on its VaR model.

LTCMs traders did not respond quickly enough to changes in market volatility as there were significant barriers that blocked the flow of information.

LTCM failed to account for the illiquidity of its largest positions in its risk calculations.

LTCMs use of high leverage is evidence of poor risk management.

An investment manager is given the task of beating a benchmark. Hence the risk should be measured in terms of

Loss attributed to the benchmark

Loss relative to the benchmark

Loss relative to the initial investment

Loss relative to the expected portfolio value